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17 April 2024

UK repossessions hit 12-year high

By Reuters
Forty thousand Britons lost their homes through repossession last year, the highest number since 1996 and analysts say the figures are only going to get worse as house prices slump and the recession takes its toll.

The Council of Mortgage Lenders said the number of home repossessions leapt by half in the three months to December compared with the same period in 2007 to 10,400, down slightly from 11,100 in the previous quarter.

That took the total for the year to 40,000, up from 25,900 in 2007 – the highest in 12 years. While the level remains far below the peaks seen in the last recession of the early 1990s, the CML thinks 75,000 will lose their homes this year.

Analysts agree that the outlook is bleak. “Unemployment is set to reach double digit rates as the recession runs its course,” said Ed Stansfield, a property economist at Capital Economics. “In short, mortgage possessions remain on course to match, or possibly exceed, previous peak of 75,500 seen in 1991.”

Currently, the proportion of repossessions to the total number of mortgages is well under that seen in the recession of early 1990s.

The CML said repossessions in 2008 constituted 0.34 per cent of all existing loans, compared with the series peak of 0.77 per cent in 1991.

Figures from the Ministry of Justice showed court orders for mortgage repossession in England and Wales rose 14 per cent on the year to a seasonally adjusted 29,095 in the final quarter of 2008, but were broadly the same as third quarter.

The data show the difficulty many British homeowners were facing in coping with the cost of their mortgages as the economy entered recession at last year-end.